The Effects of a new Aggregation Structure on Consumer Price Index Estimates The Effects of a new Aggregation Structure on Consumer Price Index Estimates / Effetti di un nuovo schema di aggregazione sulle stime dell’indice dei prezzi al consumo

Recent studies were developed in order to improve the representativeness of price indices. This paper shows the effect on the Consumer Price Index (CPI) estimates of an alternative aggregation structure. This new proposed methodology includes a stratification of the sampled units (stores) by type. Starting from an elementary aggregate of collected prices, market shares are used to reflect the contribution of each stratum. The Jevons index is used at a lower level of aggregation; then the market shares are used in the following levels to compile the final index. The behaviour of the estimates is also evaluated in the mid-to-long term through the computation of chained indices. The results underlined a potential improvement in the quality of the estimates, in comparison to the traditional method.